FDJ launches takeover offer to buy Kindred Group for $2.83B

2024-01-22

Sweden

Reading time 2:02 min

French gaming company La Francaise des Jeux (FDJ) has launched a takeover offer to buy Swedish online gambling heavyweight Kindred Group for 130 Swedish crowns ($12.43) a share, which would correspond to an enterprise value of EUR 2.6 billion ($2.83 billion) and represent a premium of 24% to Kindred Group's January 19 closing price.

According to the company, the acquisition of Kindred would create the second-biggest operator in Europe's gaming sector. Furthermore, the firm noted that this transaction will create value for FDJ shareholders. In particular, it is expected to lead to a more than 10% accretion in dividends per share, starting from the 2025 financial year to be paid in 2026.

The offer from FDJ represented the "most attractive outcome for shareholders", prompting Kindred's board to recommend the offer unanimously.

"The Board believes that the terms of the offer recognize Kindred's long-term growth prospects, taking into account the risks and uncertainties associated with the realization of those prospects," Kindred noted.

The transaction will take the form of an all-cash tender offer, launched on February 19 for a maximum period of nine months. The completion of the tender offer remains subject to regulatory authorizations and to FDJ’s acquisition of at least 90% of Kindred’s capital.

Kindred shares were up roughly 17% to 122.6 crowns while FDJ's stock traded 3.9% higher in early trading. Kindred had attracted interest from "several parties" since it started a review of strategic alternatives last year, including a possible merger or sale of the company, the Swedish firm said in a separate statement.


Stéphane Pallez

Stéphane Pallez, Chairwoman and CEO of FDJ Group, said: "Given their respective histories, strategic strengths, and core values, FDJ and Kindred are highly complementary, and I will be delighted to welcome Kindred’s management team and many talented individuals into the combined Group following this transaction."

"The combination will result in a stronger strategic positioning and significant value creation for the benefit of our shareholders and broader stakeholders," she added.


Nils Anden

For his part, Nils Andén, CEO of Kindred, commented: "I believe that combining with FDJ, Kindred can accelerate the delivery of long-term strategic projects, continue to grow in core markets, and provide a trusted source of entertainment to customers. It will also speed up our path towards 100% locally regulated revenue."

"I’m excited to bring Kindred’s extensive experience and know-how into FDJ’s organization, contributing to the development of a leading online gaming business. I’m also very proud that FDJ acknowledges and values the skilled employees and strong assets within Kindred," he added.

FDJ, which offers lottery scratch cards in France and in which the French state holds a stake of 20%, said the takeover of Kindred Group would boost its earnings and result in an accretion of more than 10% in its dividend per share.